Question: Suppose the corporate profits are subject to a 34 percent
Suppose the corporate profits are subject to a 34 percent MTR but the profits of noncorporate investment are not taxed. The gross return to corporate investment is 10 percent. Calculate the net return to corporate and noncorporate investment in the long run, assuming that the total supply of savings is perfectly inelastic for the economy. How would your answer differ if the elasticity of supply of saving were 0.5?
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